Saver's Choice: Comparing the Marginal Effective Tax Burdens on RRSPs and TFSAs
Canada’s graduated personal income tax leads most taxpayers to expect higher tax rates when they are working than when they are living on lower incomes from their retirement savings. Yet for many people, marginal effective tax rates on income from retirement savings are higher than those they face during working life. Comparing marginal effective tax rates across income levels suggests that many Canadians with savings in tax-deferred vehicles, like Registered Retirement Savings Plans, should put more future saving in tax-prepaid savings plans, particularly Tax Free Savings Accounts.
|Date of creation:||Jan 2010|
|Publication status:||Published on the C.D. Howe Institute website, January 2010|
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